Renewed and Retroactive Tax Credit for Builders

$2000 Tax Credit Available to New Home Builders

First I should say that the industry of HERS Raters did NOT ask for it to be renewed. We have instead been lobbying for new tax credit legislation which offers more money and more flexibility. This tax credit should have been dead and gone long ago, but some zealous congressional aides thought it would be nice to sneak it into the recent PATH act of Tax Extenders. It has expired and been renewed several times over the last few years. This most recent renewal makes it retroactive for all homes that meet the requirements that were built in 2015 and forward to 2016.

Which homes qualify?

New construction homes with a projected level of annual heating and cooling consumption that is at least 50% below the annual levels of a 2006 IECC reference home. 50% of those improvements need to come from building envelope improvements, not just high efficiency mechanical systems. In order to calculate compliance, the home needs to have been analyzed and tested by an individual certified to do such work, typically a HERS rater. Note that there is NO LIMIT on the number of homes a builder can claim, so if you built 200 homes that all qualify, you can claim $400,000 in tax credits.

Who may claim the credit?

Builders only. This is a business tax credit for builders. The tax form, IRS Form 8908 specifically states:

“Eligible contractors may claim the credit for new energy efficient homes that are acquired by sale or lease by and individual from that contractor during the tax year for use as a residence”

How to claim the credit

IRS Form 8908 must be filled out and filed with your tax return. Since the credit was renewed unexpectedly, the software used to calculate compliance won’t be able to print the certificates until the developer updates the software. Right now it won’t print the certificate because the tax credit expired. Don’t worry though, you can still claim the credit on your taxes because you don’t need to turn the certificates in with your filing paperwork. The tax credit certificates simply need to be in your records in the event of an audit or other proof requirement.